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India's Videocon d2h Goes Public in U.S.

Jeff Sagansky and Harry Sloan lead a $325 million investment for 38 percent of India’s fastest growing direct-to-home satellite service.

Indian media company Videocon d2h will initially trade on a U.S. stock exchange beginning on Wednesday as the result of a $325 million investment by a fund raised by American media investors Jeff Sagansky and Harry Sloan.

Through the Silver Eagle Acquisition Fund they have acquired a little over 38 percent of Videocon d2h, which has about a 20 percent share of the market in India for direct-to-home video services (similar to DirecTV in the U.S.).

Sagansky and Sloan have joined the board of Videocon d2h and will play an active role in growing the business, especially in terms of advertising. Both have committed to spending time in India multiple times each year.

According to Sagansky, the five-year-old company is the fastest growing DTH service in India, offering about 500 channels in 10 languages, with a base of around 13 million subscribers.

The other 62 percent ownership continues to be privately held, mostly by the family of 30-year-old Saurabh Dhoot, who have extensive interests in everything from oil and gas to consumer goods. Dhoot played a key role in developing Videocon d2h and runs it.

Sagansky said it is likely that the other 62 percent will soon be traded as well by the Dhoot family, but on the stock market in India.

Sagansky and Sloan had raised the $325 million in July 2013 through the Silver Eagle Acquisition Corporation, which is known on Wall Street as a “blank check company.” That means investors are buying into the potential promised by management and not actual assets. It’s the second time they have done this.

Silver Eagle now ceases to exist. The holders, mostly large funds and high network individuals, receive the new shares, which immediately begin trading on NASDAQ.

“Our goal was to find something that will be a great investment for our shareholders,” said Sagansky, “and something they could not otherwise buy.”

In an announcement, Videocon d2h is described as the first satellite service in India to roll out the 4K video format; and the only one among five competitors with its own customer service centers.

The largest pay TV satellite service in India is Dish TV (an Indian company, not the U.S. satellite operator). Another player in DTH in India is Tata Sky, which is part owned by Rupert Murdoch’s 21st Century Fox.

“India is the fastest growing pay TV market in the world,” Sagansky said. “Beyond this very significant growth we will be exploring numerous possibilities for the company to expand as a force in India’s media business.”

Sagansky has been co-president of Sony Pictures Entertainment and was a top executive at CBS. Sloan is the former CEO of MGM and was chairman of SBS Broadcasting, based in Scandinavia, which he built into a significant media player in Europe before selling out.

Now Sagansky and Sloan scour the world for the kind of big, rapid-growth media deals that are hard to find in the U.S. and help them attract new investors in deal after deal.

“You don’t find this growth anywhere else really in the world,” Sagansky said. “India, according to the IMF (International Monetary Fund), is going to be the fastest-growing economy in the world for the next five years. With its new government, which is very pro-business, there are all factors which have informed our investment.”